Coal Prices Fall After Soaring, with China in the Frame
Jakarta, CNBC Indonesia – Coal prices finally fell after rising for three consecutive days.
According to Refinitiv, coal closed at US$151.75 a tonne on Wednesday (14 October 2026), down 0.9%. The decline ended the three-day rally.
One reason for the fall was negative news from China. Coal imports by China, the world’s largest coal buyer, fell 6% year on year in September 2026, amid high domestic stocks and supply constraints from Indonesia, one of its main suppliers.
Chinese customs data showed coal imports of 43.37 million tonnes in September, down on the same month last year. However, the figure was higher than the 42.09 million tonnes recorded in August.
Fitch Ratings Senior Director Penny Chen said coal inventories at coastal Chinese power companies were higher than in previous years. This was partly due to a relatively mild summer, which reduced demand for air conditioning.
China’s electricity generation from fossil fuels also fell 4.3% year on year in August. Increased generation from hydropower, nuclear power and renewables reduced coal’s share of the power mix.
On the supply side, Indonesian exports have also been affected by adjustments to production plans and approvals for the Work Plan and Budget (RKAB). Low river levels in Kalimantan have also disrupted coal transport logistics.
Despite the September decline, China’s coal imports over January–September 2026 still rose 2.2% to 353.54 million tonnes.
Imports had surged in June and July after a fatal accident at the Liushenyu mine in Shanxi province in May prompted extensive safety inspections. With some mines suspending production, Chinese buyers turned to imports to make up the shortfall.
Global coal prices surge
Despite the fall in China’s imports, prices for coal used in power generation have risen by about 44% since the start of the year. The increase has been driven by high natural gas prices and energy supply disruptions caused by the war in Iran.
LSEG data showed that high-calorific-value Australian thermal coal futures, a benchmark for the Asian market, were trading at around US$150 a tonne. Prices briefly reached about US$152 a tonne on 6 October, approaching their highest level since December 2023.
The International Energy Agency (IEA) estimates that global coal demand will reach a record 8.94 billion tonnes in 2026, up 1.2% from 2025. Disruptions to liquefied natural gas (LNG) supplies caused by the Strait of Hormuz blockade have also made coal a more attractive, cheaper alternative, particularly for India and Pakistan.
However, the price rise is not driven solely by demand. Commodity Insights Director Mark Gresswell said supply was the main determining factor.
Indonesian exports are under pressure from tighter approvals for mining plans and domestic market obligations. Commodity Insights estimates that Indonesia’s coal exports will total about 450 million tonnes in 2026, potentially down around 10% year on year.
This marks an important shift in the global market. Historically, Indonesia has served as a swing supplier, increasing exports when coal demand and prices rise. The current decline in exports is limiting that ability to add supply.
Australia, another major coal exporter, is also facing uncertainty. The High Court of Australia upheld a ruling overturning an extension of mining at the Mount Pleasant Coal Mine in New South Wales beyond December. However, an extension to operations at another mine in the same state was approved the previous month.
Uncertainty over supplies from Indonesia and Australia is making the coal market increasingly sensitive to changes in demand and supply-chain disruptions.
In Japan, the use of existing thermal power plants has also come back into focus, including through a temporary relaxation of restrictions on operating less efficient coal-fired plants. The move reflects coal’s continuing importance in supporting electricity supply security when energy systems come under pressure.